The banking sector faced mixed performance on August 10, 2026, with Nifty Bank declining 0.27% to 57,588.85 as losses in public sector banks offset gains in private lenders. According to Angel One News, ICICI Bank gained 0.40% to ₹1,426.70, while HDFC Bank rose 0.33% to ₹733.40, demonstrating continued strength in the private banking segment. The index opened at 57,812.30 and touched an intraday high of 58,015.85 before settling at 57,588.85, with 5 stocks trading higher and 9 declining among the 14 constituents. As per Angel One News, SBI emerged as the biggest loser, falling 1.90% to ₹1,076.30, while Canara Bank declined 1.84% to ₹129.52.
According to reports from CNBC TV18, ICICI Bank is rapidly closing the valuation gap with HDFC Bank, the country's second-largest lender. The difference between the market capitalisation of HDFC Bank and ICICI Bank stands at ₹98,988 crore: ₹11.27 lakh crore for HDFC Bank when markets shut on Friday, August 7, 2026, against ICICI Bank's ₹10.28 lakh crore. This represents a significant narrowing from Thursday's difference of ₹85,667 crore, marking the closest the market capitalisations of these two banking giants have been in the last 11 years. As per CNBC TV18, if ICICI Bank's shares rally around 10% from Friday's levels, and HDFC Bank's shares stay where they are, the former will dislodge the latter as the most valued bank in India. This trend suggests a potential shift in market perception between the two private sector banking giants.
As reported by CNBC TV18, ICICI Bank may take over HDFC Bank as the most valued bank in India's private sector. However, analysts indicate that while ICICI Bank could potentially dislodge HDFC Bank from its current position, sustaining the top valuation slot would be challenging. The analysis suggests that fundamental factors beyond current market movements will determine whether this valuation shift proves sustainable. As per Maahir Mani, Research Analyst with Deven Choksey, "What we are watching is the completion of a seventeen-year cycle. ICICI was India's most valuable private-sector bank until HDFC Bank overtook it in 2009, and the corporate NPA cycle from FY16 then blew that gap wide open." Currently, HDFC Bank is the third-largest company in India by market cap, followed by ICICI Bank in fourth place and State Bank of India at a close fifth, with Reliance Industries and Bharti Airtel holding the top two slots.
According to CNBC TV18 reports, HDFC Bank faces fundamental challenges that are contributing to its current valuation difficulties. The bank's share price performance has been underperforming compared to its rival ICICI Bank, creating a significant gap in market capitalization. Analysts suggest that these underlying issues may continue to impact HDFC Bank's ability to maintain its position as India's most valuable private bank. As per Payal Pandya, Vice President-Research, Bajaj Broking Prive, "HDFC Bank's underlying core book value is roughly 66% larger than that of ICICI Bank's, and the narrow gap in their market capitalisation is entirely driven by the wide divergence in their price-to-book multiples, resulting from ICICI Bank's superior operational parameters." The bank's credit-to-deposit ratio stands at 110% and CASA ratio has dipped three percentage points from 42% to 39%, with return on assets at 1.9% and profit growth at just 5%.
According to CNBC TV18 reports, ICICI Bank demonstrates superior operational metrics compared to HDFC Bank. The April-June 2026 quarter delivered RoA of around 2.5% and NIM of 4.36% despite roughly 125 basis points of policy easing, with loan growth approaching 20% and CASA ratio of roughly 39%. In contrast, HDFC Bank's NIM is at an all-time low, though loan growth has recovered with 15.4% growth between June 2025 and June 2026. As per Mani, "For ICICI to hold the top spot, the market has to continue paying roughly 30% more for every rupee it earns. It already is, at roughly 20x trailing earnings versus about 15x for HDFC Bank, and close to 1.7x on price-to-book." The equity base comparison shows HDFC Bank's equity base is roughly 1.8 times ICICI's, while its quarterly profit pool remains about 1.3 times larger.
Despite ICICI Bank's operational advantages, analysts believe sustaining the top valuation position remains challenging. As per Pandya, "ICICI Bank has now reached a magnitude of operational performance, but to maintain such scale, the bank would have to outdo itself consistently so that its rich valuations compared to peers are maintained." HDFC Bank still possesses its strongest competitive advantage: a roughly ₹31.7 lakh crore deposit franchise built over three decades, alongside the ₹7 lakh crore legacy HDFC mortgage portfolio. The bank's management acknowledged these challenges at its 32nd Annual General Meeting on August 5, 2026, with Chairman Rajiv Kumar attributing the valuation gap to the merger impact and promising a turnaround within 2-3 years. The outcome of the RBI decision on extending CEO Sashidhar Jagdishan's term in October 2026 remains crucial, as it could act as a floor for HDFC Bank's share price.
